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Peter Linthwaite: The Industry’s Friend & Mine

Peter Linthwaite has asked to stand down as chief executive of the BVCA – The British Private Equity and Venture Capital Association – with immediate effect.

Former BVCA chief executive John Mackie will return to the BVCA as a part-time consultant to help during the transitional period until the appointment of a new chief executive.

Linthwaite has spent the last two years as ehief executive of the BVCA and in that time has signed up US powerhouses Blackstone, Bain, Carlyle and KKR to BVCA membership helping to make the organization one of the most important, if not the most important body representing the private equity industry globally.

I know Peter Linthwaite personally and he is a very kind and dignified man who has possibly suffered the worst week of his life — as he, BVCA Chairman Wol Kolade, and Vice Chairman Jeremy Hand were grilled mercilessly and angrily by the Treasury Select Committee over whether or not PE managers should pay 10% capital gains tax on carried interest or whether it should be taxed as income at 40%.

In UK law, if an individual or company holds an asset for more than two years, the taxable rate through taper relief can fall to 10% or even less. John McFall, the chairman of the Treasury Select Committee, demanded to know whether Peter believed that buyout houses were taking advantage of a tax loophole.

“There are no special tax breaks for private equity,” Linthwaite replied. “Tax relief on carried interest had helped to fuel entrepreneurial activity in the UK. Increasing those taxes wouldn’t just hurt private equity it would impact on every business and entrepreneur in the country.”

McFall highlighted a statement by Nicholas Ferguson, the founder of SVG Capital who recently said that tax advantages meant that partners often ended up paying less tax than their cleaners. McFall shouted: “Has he lost his marbles, Mr Linthwaite?”

After this 45 minute haranguing by MPs, Linthwaite and Co were subjected to a press onslaught for refusing to comment on certain questions.

In a country that has more than a dozen daily national newspapers – if the press are after you there is no where to hide. This story moved from the business pages to the front pages as they called for a head to roll.

And with great strength of character Peter Linthwaite offered up his own.